‘Rice-release’ may lower prices

‘Rice-release’ may lower prices


THE NATION July 1, 2016 1:00 am

RICE exporters have warned against the government’s plan to clear out its remaining inventory

“The government should release the stockpiles gradually, for example 1 million tonnes at a time, to avoid negative impacts,” Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said yesterday.

The planned volume is too large and could put pressure on rice prices, he said.

After attending a meeting of the Thai Rice Management Policy Committee, Chutima Bunyapraphasara, permanent secretary of the Commerce Ministry, announced the plan to release all inventory totalling 9.5 million tonnes between now and the first half of next year.

The plan was aimed at increasing the efficiency of managing rice stocks and future planning.

The committee said it was confident that the move would not affect rice prices as globally, demand in the market was strong while output could drop because of drought.

Rice prices have been sliding for three years.

According to the United Nations’ Food and Agriculture Organisation, the average price of Thailand’s benchmark 5-per-cent rice fell from US$573 per tonne in 2012 to $518 in 2013, $423 in 2014 and $386 in 2015.

The average price in the first five months of 2016 continued the downtrend, tumbling by 3.6 per cent on year to $392.

In the first step of the release, rice traders will be invited to join the Foreign Trade Department’s auction of 2.18 million tonnes. Bids must be submitted on July 25.

The rice committee meeting approved the establishment of a foundation to promote innovation and commercial operations for agricultural products with initial capital of Bt750 million.

Private enterprises will be encouraged to take part in the foundation and promote sustainable development for the rice industry.

The foundation’s target is to double the value of agricultural products, mainly rice.